A good buy: Pitti Laminations

by khalid on 05/10/2011 · 0 comments

Pitti Laminations makes electrical laminations which are used in defence, power projects, and aerospace. The company’s products are in huge demand and most of the products are exported. GE is the major client of the company. Recently the company had issued 4000000 shares at around rupees 39.15 which led to an open offer in the market at Rs.41. Since then the company is trading at Rs 45.

With the current market price we think that there will be no participation in the open offer.

The major raw materials used for the manufacturing by the firm are copper and HR coil. The last month saw a huge cut in the copper prices so we expect that this will act on the positive side of the company’s bottomline. In FY11 the company’s exports were about 33-35 percent which is expected to increase for this financial year because of increased demand from GE and other foreign buyers. It is expected that the exports this fiscal to be over 50 percent. This will result a 60 percent growth in the topline of the company and will have an impact on the bottomline. For the first quarter the company posted earnings per share of Rupees 4.50 and we are expecting to post Rs 16 for FY12 compared to an EPS of Rs 11 posted in FY11.

“Bell the bull says: the stock seems to be attractive at the current levels at looking at the expected performance for this fiscal it seems to be a definite buy for investors.”

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